A trademark is a visual representation of a name, word, label, device or numeric characters utilized by a business to differentiate its goods and/ or services from other similar goods and/ or services deriving from a different business. Trademark works as an exclusive identity of the goods and/or services that a person is offering/selling from other such goods/services.
A trademark, once registered, is an untouchable asset or intellectual property for a business and is used to safeguard the company’s investment in the brand or ideogram.
A trademark is registered once it is distinct for the goods and services that are being provided. Tendered trademarks that are similar or identical to an already existing registered trademark cannot get registration. Besides this, trademarks that are deceptive, generic, offensive, similar, contains exclusively protected emblems, etc. cannot be registered either.
In India, trademarks are registered by the Controller General of Patents Designs and Trademarks, Ministry of Commerce and Industry, Government of India. Trademarks in India are registered under the Trademark Act, 2016 and it authorises the trademark owner the right to sue for damages when contraventions of trademarks occur.
Following the registration of the trademark, the symbol can be used by the owner and the said trademark registration will be valid for a fixed period of 10 years. However, the registered trademarks approaching their expiry can easily be renewed by applying for a trademark renewal application for an extended period of another 10 years.
If you have your business trademark registered, you have many benefits, from exclusive use to doubling your profits. But what happens in the case of businesses that do not have a trademark registration? Did you know that it can involve a great risk?
When you take the time to think about your future business, product, or service you want to offer, you wonder how profitable it can be. However, having good numbers is not a guarantee of the solidity you will obtain.
We share with you four important points about the disadvantages of not registering your trademark on time:
You do not have a property right
therefore, you have a vulnerability in case you want to invest in advertising for your business.
Exposed to theft.
If the trademark is not registered, any person is free to file the application before the Trademark Registry. Whoever obtains this right, can prevent another person from using the trademark or could take the case to court to demand payment for use.
Trademark not registered
Since your trademark is not registered, it cannot be assigned, serve as a guarantee or be part of a franchise, since there is no ownership to back it up. This represents a loss of business opportunity.
You must avoid at all costs the entry of a brand similar to yours. Your customers may believe that it is the same product or service, thus generating losses in sales and unfair competition (they may sell a low-quality product with your trademark and at a lower price).
What are unregistered trademarks and how is it different from registered trademarks?
Before we compare registered and unregistered trademarks, let’s first understand what are registered and unregistered trademarks and the legal recognition one gets after such registration.
A trademark registered under the Trademark Act, 1999 confers exclusive rights upon the owner of such a registered trademark. Upon registration, his ownership over such a trademark becomes the prima facie evidence. Additionally, he gets to use such marks exclusively under the class of items it has been registered under. Once the trademark is registered, its validity remains for 10 years and further, the trademark needs to be renewed.
Suppose a third party uses a registered trademark illegally, then such use shall amount to trademark infringement. The owner of such registered trademark can institute a suit for infringement under the Trademarks Act, 1999. Such a suit for infringement can be civil or criminal.
As we discussed previously, registration of a trademark is not mandatory as per the Act, so the trademarks that are not registered are called unregistered trademarks. It can be used with respect to goods and services. However, the protection that they get under law is very limited as compared to the legal protection given to registered trademarks.
Suppose if a third party makes illegal use of an unregistered trademark, it shall not amount to infringement of the trademark. Therefore, in such cases, a suit for infringement under the Trademark Act, 1999 cannot be initiated. The remedy available with the owner of an unregistered trademark is ‘Passing off’ under the law of torts.
A major concern in the cases of passing off is that it is essential to establish in the court that such an unregistered trademark has a reputation in the market and can be easily distinguished under the class of goods, business, or service for which it is used .
Diagrammatic representation of the difference between registered and unregistered trademarks:
|S No.||Base||Registered trademark||Unregistered trademark|
|1||Meaning||When a symbol, sign, word etc. is registered by its owner as the provisions given under the Trademark Act, 1999 then such mark is called a registered trademark.||When a symbol, sign, or word is used by the owner but not registered as per the provisions of the Trademark Act, 1999 then such a mark is called an unregistered trademark.|
|2||Protection under||Protection of registered trademarks is provided under the Trademark Act, 1999.||Protection of unregistered trademarks is provided under common law.|
|3||Burden of proof||Once the mark is registered, the burden of proof of its early use on the opponent.||When the mark is not registered, the burden of proof of early use lies on the owner himself.|
|4||Remedy||A suit for infringement can be instituted.||Suits for passing off can be instituted.|
An owner of a registered trademark TM symbol upon application of registration. Once the mark gets registered, the owner can use the symbol, which signifies that the registration of the mark is complete as per the provisions of the Act.
The user of an unregistered trademark can use TM symbol but notsymbols.
Protection of unregistered trademark under Trademark Act, 1999
Although unregistered trademark’s illegitimate use has a remedy in law in the name of passing off under the law of torts, it has very limited statutory protection under the Trademark Act, 1999.
Section 34 and Section 35 of the Trademark Act, 1999 gives statutory protection to unregistered trademarks. These sections safeguard the interest of an unregistered trademark by simply stating that a prior user of a trademark will get priority over subsequent users, despite being registered. Therefore, even though the Trademark Act, 1999 does not provide any statutory remedy for illegitimate use of unregistered trademarks, it aims to protect the interests of a bona fide user of such mark on the basis of prior use. This section safeguards the interests of prior users and encourages them to continue their business without the fear of being sued for infringement of the mark by a subsequent registered user of an identical mark.
Protection of unregistered mark under common law
Previously, we have already discussed how a remedy for illegal use of an unregistered mark is by way of passing it off under common law. Now, let’s understand what is passing off and how does common law protect the interests of an unregistered trademark user.
In the case of Perry v Truefitt (1842), it was decided that ‘One should not sell goods under the pretext that they are of another’ a principle upon which an action against passing off is based on. The intent of this law is that one should not misrepresent the item to be someone else’s. The reason is, a brand creates trust within its consumers and a lot goes into creating this brand value in the market. So, by simply using an identical trademark, one must not misrepresent the consumers it to be of another.
In simple words, passing off is nothing but an unfair trade practice through which one seeks to attract consumers and seek profits from the brand value created by another existing brand in the market. If it becomes evident that the defendant willingly wanted to deceive and mislead the general public, an action against passing off shall become successful.
Trademark is the identity of a brand and a product. One must be very conscious and aware of the rights arising from such a trademark. In order to enjoy the bundle of rights provided under the Trademarks Act, 1999 it is possible that such a person registers his trademark. The reason, being although the Trademark Act, 1999 talks about unregistered marks, the rights of an owner of an unregistered trademark are very limited.
It is only due to common law which is nothing but judge-made law, that the unregistered user of trademark has at least the remedy of taking an action against passing off. And even to avail of this remedy, the user will have to prove that his use was significant along with the other essentials specified in this article.
It is only because of the absence of concrete provisions with respect to unregistered trademarks that the cases related to the subject matter are highly dependent on judicial decisions. So, unless a precedent is delivered by the Supreme Court or High Courts or an amendment in the Trademark Act, 1999, the laws pertaining to unregistered trade shall remain the same.